TYPES OF SAVINGS

ACCUMULATION FUND:An Accumulation fund is in effect a long - term emergency fund. Accumulation fund is able to cover a unexpected expenses or large purchases. An accumulation fund allows us to have longer time frame in mind-anywhere from one to five years before we will need the money. Because we plan to leave the money in the account for one to five years,and here liquidity is not as important as higher returns.

There are four most famous investment options for accumulation funds :

• Certificates of deposit(CDs)

• Ultra short-term bond funds

• Short-term bond funds
  

• Mortgage-backed bond funds.

CERTIFICATES OF DEPOSIT(CDs):CDs offer us a safety and reasonable returns but there is a lack flexibility due to the early withdrawal penalties.

ULTRA SHORT-TERM BOND FUNDS:If we don't need our money for six months to a year, we might want to consider Ultra short-term bond funds.These ultra short - term bonds funds typically have very low volatility and pay a reasonable rate.


SHORT-TERM BOND FUNDS:If we don't need our money for two or three years, short-term bond funds will offer the potential for better returns at a slight increase in volatility.

MORTGAGE-BACKED BOND FUNDS:If we don't need our money for four or more years, we might want to consider mortgage-backed bond funds,such as Ginnie Meas. Mortgage-backed bond funds offer a attractive yields and pay a monthly dividends , which we can reinvest in more shares.


LONG-RANGE INVESTMENTS:There are three primary reasons for long-term investing . They are to help our family for achieving a greater degree of security,to provide an inheritance for our family , and for fund retirement.Long-term investments are not intended to be short-term get-rich-quick programs.Long-range investments are exactly what they say they are-investments meant to last and grow for years to come.